Bilateral ties strengthen through commerce

08:39, January 28, 2011      

Email | Print | Subscribe | Comments | Forum 

Though on opposite ends of the Silk Road, the ancient trade route linking Europe with Asia, Turkey and China only established formal relations in 1971.

But as active players in an increasingly globalized economy, the two countries seem to be making up for lost time.

As the world's second-largest economy and one of the most important energy consumers, China has been eager to invest in new markets and seeks trading partners in the Middle East, the Caucasus and Central Asia.

Chinese officials recognize Turkey's geographical advantage. With one foot in Asia and the other in Europe, Turkey straddles energy resource-rich economies of the East and the prosperous countries of Western Europe. Its customs union with the European Union (EU) also provides another significant benefit.

Turkey is also opening up to the world's fastest growing economies, particularly with Asia's most dynamic markets: China, Japan and India.

As Ankara steps up its diplomatic efforts, Turkey has dispatched several missions to China over the past two years. The most recent top-level visit took place in June 2009 when Turkish President Abdullah Gul paid a visit to Beijing.

In October, Chinese Premier Wen Jiabao met with Turkish counterpart Prime Minister Recep Tayyip Erdogan, the first visit of a Chinese premier to Turkey in eight years. Just three weeks later, Ankara sent Foreign Minister Ahmet Davutoglu to China for a seven-day visit.

"We are normalizing history. As the Silk Road prevailed for centuries, it was abnormal for Turkey-China relations to be so distant. Turkey is ready to work more closely with China. Our joint task now is to further deepen and diversify our cooperation by tapping its full potential," Davutoglu said.

The warming in diplomatic relations culminated in the signing of a strategic partnership during the visit of Wen, who at that time expressed hope for "turning a new page" in Chinese-Turkish relations.

"(It) will be an important milestone and contribute to peace in the world," said Wen, who also highlighted Turkey's "power and influence in the international community and its region".

Entering China

While most of the world was caught in an economic quagmire during the 2008-2009 global recession, Turkey and China posted strong GDP growth figures. China has now surpassed Japan as the world's second-largest economy in terms of nominal GDP.

Meanwhile, Turkey's GDP surged 11.7 percent year-on-year in the first quarter of 2010 and 10.3 percent year-on-year the following quarter, making it the second-fastest growing economy among the G20 countries after China.

Dubbed the "China of Europe" by Economist Magazine, Turkey is emerging as a regional powerhouse. It has the eighth-largest economy in Europe and ranks 17th globally in terms of total GDP.

The Organization of Economic Cooperation and Development predicts the Turkish economy will grow 8.2 percent in 2010, 5.3 percent in 2011 and 5.4 percent in 2012.

"Turkey and China are lifting the growth of the world's economy," said Husnu Ozyegin, the chairman of the Turkish-Chinese Business Council and Turkish construction firm Fiba, which became the largest Turkish investor in China when it secured a project to build a $220 million shopping center in the country.

"The Chinese market is very important in the medium term because China is expected to be the largest economy in the world in the next 15 to 20 years. Any major country or company that does not expand its relationship with China cannot grow," said Ozyegin.

Turkey's largest companies understand the huge importance of China and have established manufacturing facilities in the country.

Cimtas Steel set up a plant in the Ningbo Free Trade Zone to produce steel components for the energy sector, while Kordsa Global, a subsidiary of Sabanci Holdings, acquired IQNE Qingdao Nylon Co.

"China has surpassed the US market in terms of size and became the biggest automotive market in the world with sales reaching 15.6 million units in 2010. Today, China accounts for 50 percent of growth in the global automotive sector and almost 70 percent of tire consumption.

"Demand for our tires has increased so we need to be there," Kordsa Global CEO Hakan Tiftik said.

Demirdokum, a manufacturer of heating, water heating and air conditioning products, added China to its list of overseas locations and established a partnership with Chung Mei Co in China to produce water heating products.

Aside from construction companies and food manufacturers, the financial sector also envisions good prospects in China as illustrated by Garanti Bank and Isbank, which have had branches in Shanghai since the late 1990s.

The trade picture

Bilateral trade between China and Turkey surged from $1 billion in 2000 to $14.2 billion in 2009 and is expected to exceed $17 billion in 2010, according to the Turkish Exporters Assembly. In line with their commitment to strengthening economic relations, both countries set a timetable to double bilateral trade to $50 billion by 2015 and $100 billion by 2020.

Although rapidly expanding, current bilateral trade is tilted in China's favor. But State Minister for Trade Zafer Caglayan has expressed Turkey's commitment to boosting Turkish exports to China, particularly seeking larger market shares for its agricultural products like apricots, olives and olive oil.

The growing prosperity of Chinese consumers has also raised demand for luxury goods exports such as jewelry.

"Turkish exports will grow. But building a two-way economic relationship with China and closing the gap between imports and exports can only been done through greenfield investments and foreign direct investment from China," said Ozyegin.

The Turkish government also wants increased Chinese investments in Turkey, more tourism from China and joint ventures in third countries.

Chinese companies are now involved in construction of a high-speed rail line between Ankara and Istanbul that will reduce travel time from nearly 5 hours to 1.5 hours. And China also agreed to grant loans for the construction of a high-speed Silk Road Railway between Turkey's northwestern province of Edirne and the eastern province of Kars.

"We are planning to construct lines for high-speed trains between Ankara-Izmir, Anakara-Sivas, Sivas-Erzincan, Erzincan-Trabzon, Sivas-Malatya, Elazig-Diyarbakir, Eskisehir-Antalya and Konya-Antalya," said Turkish State Railways Director General Suleyman Karaman.

The automotive sector is another promising area for collaboration. "With Turkey becoming a production hub for the European market, Chinese automotive companies could start producing in Turkey to reach nearby markets," said Izmir Chamber of Commerce Chairman Ekrem Demirtas, who pointed out that Chinese companies Haima and Dongfeng Motor are studying the feasibility of investing in Izmir.

Murat Mermer, deputy chairman and general manager of Mermerler Otomotiv, said his firm plans to set up a factory in Sakarya to manufacture Turkey-made Chery cars.

In the mining sector, Turkish firm Eti Soda and Chinese counterpart Simec finalized an agreement to mine and build an enrichment plant that will annually produce 1.1 million tons of soda ash and 100,000 tons of sodium bicarbonate.

To mark the 40th anniversary of the establishment diplomatic relations this year and highlight the new era in their friendship, the two countries declared 2012 as the "Year of China" in Turkey and 2013 as the "Year of Turkey" in China.

Source: China Daily
  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Focus On China
  • Shanghai World Expo 2010
Major headlines
Editor's Pick
  • My motherland, right or wrong?
  • Rabbit mania hops across China
  • Grand feast shows most dishes in multiple venues
  • Volcano erupts in southern Japan
  • Grand feast shows most dishes in multiple venues in central China
  • Decorations for upcoming Spring Festival
Most Popular
Hot Forum Dicussion